10 Mid-Cap Stocks with ‘Strong Buy’ Ratings Set to Rally Over 32%
With mid-cap stocks recently experiencing a wave of selling pressure, investors may be wary of this segment. However, analysts see substantial upside potential in several mid-cap stocks that have strong fundamentals, robust sector positioning, and promising growth trajectories. In fact, a few of these stocks could rally by more than 32% over the next 12 months.
Here’s a look at the factors influencing mid-cap performance and a list of 10 mid-cap stocks with ‘Buy’ or ‘Strong Buy’ recommendations that analysts believe can deliver solid returns.
Why Are Mid-Cap Stocks Under Pressure?
Mid-caps typically fare well during early correction phases. However, with an extended correction, many mid-cap stocks are starting to feel the pressure. The market regulator SEBI’s recent measures to curb excessive speculation in mid-caps, alongside broader market adjustments, have also contributed to the current pullback in this segment.
Why This Correction May Be an Opportunity
Despite recent declines, mid-cap stocks often provide growth opportunities during corrections. Investors holding quality mid-caps with solid fundamentals could benefit from staying the course and avoiding hasty decisions based solely on market volatility. However, it’s essential to review each stock’s fundamentals and the rationale for buying.
Methodology for Choosing the Top Mid-Cap Stocks
- Upside Potential: Only stocks with an estimated upside of 32% or more over the next 12 months are included.
- Analyst Ratings: Stocks must have a “Buy” or “Strong Buy” rating, with recommendations from at least five analysts.
- Market Capitalization: Stocks selected fall within the ₹5,000 crore to ₹25,000 crore range, making them mid-caps by market standards.
10 Mid-Cap Stocks Poised for a 32%+ Rally
- Sterling and Wilson Renewable Energy Limited
- Sector: Renewable Energy (Solar)
- Business: Provides end-to-end EPC and O&M solutions for solar power projects globally.
- Why It’s a Buy: With a focus on clean energy, Sterling and Wilson is well-positioned in the growing renewable sector, especially as demand for solar solutions rises .
- Gulf Oil Lubricants India Limited
- Sector: Lubricants
- Business: Manufactures and markets automotive and industrial lubricants.
- Why It’s a Buy: Gulf Oil has a diverse portfolio and a strong distribution network. With rising industrial demand, the company is set to benefit from an expanding market.
- TVS Supply Chain Solutions Limited
- Sector: Supply Chain and Logistics
- Business: Offers comprehensive logistics and supply chain solutions across multiple industries.
- Why It’s a Buy: As global and domestic supply chains evolve, TVS Supply Chain Solutions’ expertise positions it well for sustained growth.
- CE Info Systems Limited
- Sector: Digital Maps & Geospatial Software
- Business: Provides digital maps, IoT, and geospatial data for various industries.
- Why It’s a Buy: The rise of location-based technology solutions across sectors like automotive, telecom, and logistics boosts growth prospects for CE Info Systems.
- Finolex Cables Limited
- Sector: Electrical and Communication Cables
- Business: Manufactures cables and other electrical products.
- Why It’s a Buy: With infrastructure and real estate development on the rise, Finolex Cables is likely to see increased demand for its range of products.
- Gokaldas Exports Limited
- Sector: Apparel & Exports
- Business: Designs, manufactures, and exports a wide range of apparel.
- Why It’s a Buy: As one of India’s leading apparel exporters, Gokaldas Exports benefits from the global shift toward Indian textiles, providing long-term growth potential.
- PCBL Limited
- Sector: Specialty Chemicals
- Business: Leading producer of carbon black used in plastics, inks, and coatings.
- Why It’s a Buy: PCBL’s diversified applications across multiple industries ensure resilience, even amid cyclical downturns in specific sectors.
- Welspun Living Limited
- Sector: Home Textiles & Flooring Solutions
- Business: Manufactures home textiles, including bath and bed products, as well as flooring solutions.
- Why It’s a Buy: Welspun’s diverse portfolio and global brand presence support its long-term growth in both domestic and international markets.
- Suprajit Engineering Limited
- Sector: Auto Components
- Business: Produces control cables, lamps, and other automotive components.
- Why It’s a Buy: With a strong presence in both domestic and international markets, Suprajit Engineering is poised to benefit from the ongoing expansion of the automotive sector.
- Karnataka Bank Limited
- Sector: Banking & Financial Services
- Business: Offers retail and corporate banking services.
- Why It’s a Buy: With a robust retail banking portfolio and growth in digital banking services, Karnataka Bank is well-positioned to benefit from the rise of digital finance.
Key Takeaways for Mid-Cap Investors
- Stay the Course: Corrections can present opportunities, particularly if your investment is based on long-term growth fundamentals.
- Reassess and Realign: Ensure that each stock aligns with your financial goals and timeline. Avoid decisions driven by short-term volatility.
- Sector-Specific Strength: Look for stocks in sectors experiencing positive changes—such as renewable energy, digital technology, and logistics—as they are more likely to deliver strong returns.
Final Thoughts
Mid-cap stocks may currently be under pressure, but quality stocks with solid fundamentals and positive analyst sentiment present valuable opportunities for contrarian investors. By focusing on stocks with strong buy ratings and significant growth potential, you can navigate the current market turbulence and position yourself for long-term gains.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Consult a certified financial advisor before making investment decisions.